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The salaries of US-born computer scientists might be higher were it not for the influx of high-skilled immigrants into the tech industry, a new report suggests.
According to a working paper published by the National Bureau for Economic Research, a spike in the immigration of high-skilled immigrants is generally good for American consumers, American tech companies, and the average American worker; It can bring more jobs, cheaper products, and faster innovation. But it can also depress earnings for US-born computer scientists.
The report, which analyzed the economic impact of high-skilled immigration during the dot com boom, concludes that “wages for US computer scientists would have been 2.6% to 5.1% higher” by 2001 had there been no influx of high-skilled immigrants during the 1990s.
Since his inauguration, President Donald Trump has signaled a coming crackdown on high-skilled immigration. A leaked draft of an executive order on the work visa program advocates for regulation that “prioritizes the interests of American workers.” Tech execs argue that for the pace American innovation to continue abreast, the country needs foreign born computer scientists; Apple CEO Tim Cook, who’s been meeting with leading Republicans, wrote in a letter to employees that immigration is important “both to our company and to our nation’s future.” But this new report finds that, while companies would profit and the economy overall would benefit, high rates of immigration can have a negative impact on programmer pay.
In order to measure the impact of high-skilled immigration on the tech industry, researchers used the tech boom of the late 1990s as a model; the goal was to figure out whether US-born computer scientists would experience a net positive or net negative impact if the US hadn’t opened the doors to more and more immigrants during that time. What they found was that, in the absence of immigration, both wages and overall employment for US computer scientists would have been higher.
“We did end up finding that there are costs to US-born computer scientists, but on average, US workers are still better off under high-skill immigration,” said Gaurav Khanna, one of the report’s authors. “The average US worker is better off, managers are better off, owners are better off, consumers are better off, anyone who uses a computer is better off, because they’re using better technology to do their own work.” Even US-born computer scientists, facing the lower wages that follow a spike in immigration, typically just sought other, higher-paying careers, such as management, he said.
Also better off are the tech companies themselves. For years, leaders in the tech industry have been staunch defenders of high-skilled immigration, pushing policymakers to raise the limit on the number of workers allowed into the country. And the NBER report found that there’s a good reason for that — more immigration increases the overall profits of the tech sector. As its authors note, “It is then no surprise that Bill Gates and other IT executives lobby in favor of increasing quotas for high-skill immigrants.”
But the impact of immigration isn’t just about the bottom line. Innovation and immigration are positively correlated — if the US doesn’t continue to bring in top talent from around the world, its tech industry could lose its competitive edge.
“A lot of people in the tech industry do believe that immigration is going to help the US maintain this advantage they have in IT production that has slowly been slipping away to other countries like India,” Khanna said. According to data from job search site Indeed.com, tech workers looking for jobs outside their home country look at the US first, but also consider Canada, Australia, and the UK, among others. A throttling of high-skilled immigration into the US could be a real boost for the tech industries in those countries.
Silicon Valley venture capitalist Sam Altman, who has spoken out publicly against the early immigration crackdowns of the Trump administration, says it’s actually because of immigration that the US tech industry became dominant in the first place. Top-paying companies like Google or Facebook wouldn’t be able to pay those high salaries, Altman believes, if it weren’t for their ability to bring in “the best talent from around the world.”
“Although I’m willing to believe that in a normal environment immigration puts some downward pressure on wages, I think the fact that we can have these giant wages for software engineers is a factor of how powerful these companies have gotten,” Altman said. “[One reason tech] companies have become so powerful and valuable is because of immigrants.”
Khanna echoed that sentiment. “I do think [the US tech industry] would definitely exist and be a major player,” he said, “but it would probably not be as strong.”